On the recordMarch 9, 2011
I rise today to introduce important civil justice legislation. This legislation is desperately needed for several reasons--the most important of which is to cut down on the costs and expenses that are preventing private businesses from creating jobs for our fellow citizens during these difficult times. The billions of dollars wasted on frivolous lawsuits cost Americans jobs and severely damage our economy. The precise cost of America's lawsuit culture is staggering. The tort system's direct costs in 2002 were $233 billion, the equivalent of a 5 percent tax on wages. Today that number is even higher; the annual direct cost of American tort litigation exceeds $250 billion. Indeed, frivolous lawsuits are helping to prevent the 'innovation' that the Obama administration is touting as the key to 'job creation' and economic recovery. For example, firms with recent initial public offerings are most at risk to be sued. In fact, companies are most likely to be sued in their second year of public trading. In other words, the very corporations most likely to be the source of significant new job creation are at the highest risk of being sued just when they are seeking expansion capital through public offerings. In particular, frivolous lawsuits hurt small businesses. Small businesses rank the cost and availability of liability insurance as second only to the cost of health care as their top concerns, and both problems are fueled by frivolous lawsuits.
